Wide-ranging issues on Cotton Council slate

“The cotton industry has excellent prospects for achieving profitable production and processing,” National Cotton Council Chairman Jay Hardwick said at the opening session of the 2010 Beltwide Cotton Conferences.

Acknowledging the varied issues still confronting the industry in a down economy, with increasing world competition, the Louisiana cotton producer said research, education, and technology transfer will continue to be “critically important” and that the council “will continue its long-standing commitment of resources for technology development and transfer and achieving resolution for technology-based priorities.”

Following 2009’s “catastrophic rains — as much as 60 inches to 90 inches was not uncommon in many areas of the Mid-South — and severe drought in south Texas,” Hardwick says the council joined other organizations to seek “prompt and necessary emergency assistance.”

Sens. Thad Cochran and Roger Wicker, R-Miss., and Blanche Lincoln, D-Ark., introduced bipartisan legislation that utilizes the direct payment delivery mechanism to provide assistance to growers in counties that have been declared disaster areas by the secretary of agriculture. The bill includes a fund to provide assistance for cottonseed losses and specialty crops and livestock are also eligible. Reps. Marion Berry, D-Ark., and Travis Childers, D-Miss., introduced similar legislation in the House.

“The council is urging Senate and House leaders to support this legislation and find the appropriate legislative vehicle for timely delivery of the assistance,” Hardwick said. It has also “urged all agencies to fully utilize existing programs and authorities to provide financial assistance to growers and related agribusinesses.

“We aren’t being critical of Congress’ good intentions to include a permanent disaster program in the 2008 farm bill, but that program cannot deliver the assistance necessary to address these very serious issues.”

Other issues in the forefront of the council’s 2010 agenda, Hardwick says, are:

• A Sixth Circuit Court of Appeals ruling that all pesticide applications over or near U.S. waters require a permit.

• Legislation in the Senate to amend the Clean Water Act to greatly expand its jurisdiction.

• Climate change legislation that has narrowly passed the House and is now under consideration in the Senate.

• A food safety bill that has passed the House and contains several negotiated on-farm exemptions, but still includes gins and cottonseed facilities under its provisions.

• A House Agriculture Committee bill that would provide the Commodity Futures Trading Commission with more enforcement authority and impose new requirements for reporting and clearing of trades (these provisions were incorporated in the more comprehensive financial reform bill that passed the House late in 2009).

The council continues active involvement in trade issues, including the ongoing World Trade Organization case involving Brazil’s allegations that the U.S. cotton program unfairly impacts world cotton trade.

In September, the WTO’s arbitration panel authorized $147 million in retaliation authority for cotton, with varying amounts of countermeasures from year to year for the GSM export credit guarantee program. The WTO dispute settlement body upheld the findings in November.

The council was “astonished,” Hardwick says, “that anyone could conclude that U.S. cotton production is damaging Brazil’s interests, and world cotton data continue to demonstrate that the U.S. cotton program cannot be damaging to Brazil or any other country’s interests.”

The council has had meetings with the office of the U.S. Trade Representative “to examine our options,” he notes. “We’ve encouraged them to prepare to call for a new panel if Brazil announces retaliation and that retaliation is excessive.”

The establishment of a new panel would provide the U.S. with the opportunity to introduce all the changes that have been made to its cotton program and to the GSM program, which, Hardwick says, “we believe will clearly demonstrate our compliance with WTO rules.”

In the ongoing WTO Doha round of negotiations, he says the council continues to support “a comprehensive agreement that does not include any reductions in commodity programs without proportionate documented gains in market access.

“We’re also asking our negotiators not to agree to any modifications to the cotton program in advance of a comprehensive agreement and are continuing to emphasize that the proposal presented in July 2008 in Geneva should not be the basis for future negotiations.”

Hardwick commended “the stance taken by U.S. Trade Representative Ambassador Ron Kirk during recent WTO meetings in Geneva. We were reassured to hear his defense of the U.S. cotton program in the face of continued, but unwarranted, criticism. Also, Ambassador Kirk stands firm in the position that there must be greater ambition in market access than currently displayed in the draft text.”

In addition to near-term challenges, the council continues a major emphasis on effectively addressing long-term goals, Hardwick says.

He reported “good progress” on the Cotton Foundation’s Vision 21 project, which provides a three-pronged approach for addressing critical issues facing the U.S. industry.

Vision 21 is jointly managed by the council, Cotton Council International, and Cotton Incorporated, and is underwritten by a $1 million grant from Monsanto, with additional funding from other Cotton Foundation member companies, including a recent contribution of $90,000 from John Deere.

The project includes an assessment of the fastest-growing consumer markets for cotton textiles, life cycle studies to strengthen cotton’s sustainability message, and a thorough analysis of ways to improve the flow of cotton.

“Contracts with consulting firms are in process to carry out this work,” he said.